The economics of genetically modified canola Network of Concerned Farmers November, 2007 2 Executive summary Prior to any acceptance of GM food crops, State governments have the legislated responsibility to assess economics, industry preparedness and the associated market risk. Although there are many vested interests in providing a path to market for GM food crops, State governments can not ignore their responsibility to retain a path to market for non-GM crops. Calculations based on the biotech industry’s own figures show that if GM canola was introduced to Australia and 20% of farmers adopted it, Australian farmers will be at least $143 million/year worse off. The key problem is that non-GM farmers will be burdened with a large proportion of this loss, valued at $65.52 million. According to the Australian Government, non-GM farmers will have little or no legal recourse against the GM industry for economic loss caused. Canada is the only major canola producer in the world to have adopted GM canola, and the vast majority of the world’s canola remains GM Free. Contrary to the rosey picture painted by industry, the profitability of canola production in Canada has crashed over the past decade. Canadian canola farmers are heavily subsidised, and if Australia adopted GM canola, farmers would be likely to need similar subsidies. Australia’s most important export markets for canola are Japan and Europe, accounting for 41% and 38% of exports in 2006.Australian canola has been attracting premiums and preferential market access in these countries, precisely because of its non-GM status. Canada lost its entire canola seed exports to Europe as the result of introducing GM canola. This year a delegation of Japanese consumer groups visted Australia and delivered a petition signed by 151 consumer organsations, representing 2.9 million Japanese consumers, urging the State Governments to extend their GM food crop moratoria. The domestic market accounts for approximately 20-30% of total canola seed production (depending on the year), making it the third largest market for Australian canola. The two largest buyers are Goodman Fielder and Unilever, both of which have a policy to avoid the use of GM derived canola oil. Peter Margin, the CEO of Goodman Fielder, recently wrote to State Premiers urging them to extend their moratoria on GM food crops. Coles also spoke out against GM food at a recent Parliamentary forum on the topic. Although canola is a relatively minor crop, the introduction of GM canola has the potential to impact negatively on all farming industries. GM canola seed can easily contaminate other grains and there is market sensitivity to GM canola in other grains, such as barley and wheat, and in stock feed. Eckard Huebl the Managing Director of the Tatiara Meat Company, Australia’s largest lamb exporter, recently wrote to State Premiers urging them to extend their GM canola moratoria. He stated that the Australian prime lamb market would suffer if it lost its ‘GM-free’ marketing edge. Serious questions remain surrounding the safety of GM foods. It is therefore hardly surprising that recent poll results show that the majority of Australian farmers do not want to grow GM crops and the majority of consumers do not want to eat them. Initial attempts to segregate non-GM canola in Canada failed and it is now nearly impossible to grow non-GM canola in most of the country. Based on the North American experience, it is virtually guaranteed that a GM/non-GM segregation system will fail because the seed supply is already contaminated. Canadian researchers tested 33 samples of certified non-GM canola seed and found that 32 samples were contaminated with GM varieties. The push to lift the moratoria in all States is predominantly coming from those with a commercial interest in the uptake of the GM technology. They are well funded and encouraged by both State and Federal Governments, who wish to withdraw public funding for research and development and encourage commercial investment. Key agronomic, market and coexistence issues remain to be resolved before the State moratoria on GM food crops can be lifted. To allow time for these issues to be resolved the current moratoria should be extended until fair risk management is introduced. 3 Contents Executive summary 2 Introduction 5 1. Agronomic issues 6 1.1 Weed management 6 1.1.1 Glyphosate resistance 7 1.2 Yield 7 1.2.1 Australian trial data 7 1.2.2 The Canadian Experience 8 1.2.3 Further research requirements 8 1.3 Costs 9 1.3.1 Direct costs 9 1.3.2 Additional costs 10 1.4 Profitability 11 2. Market issues 13 2.1 The global canola market 13 2.2 Market access 13 2.2.1 Export markets 13 2.2.2 Domestic markets 14 2.3 Consumer opinion 15 2.4 Uncertainty around the safety of GM food 15 2.5 Premiums 15 2.6 Impacts on other industries 16 3. Coexistence issues 17 3.1 Creating a path to market for GM crops 17 3.2 Maintaining a path to market for non-GM crops 17 3.2.1 Coexistence Principles 17 3.2.2 Obligations of non-GM farmers under the proposed scheme 18 3.2.3 Segregation 18 3.2.4 Contamination 19 1.3 Liability 19 1.4 Industry preparedness and acceptance 20 4. The net economic effect of introducing GM canola 21 5. Proponents of GM crops and their vested interests 22 5.1 Government 22 5.2. Researchers 22 5.3. Seed industry 22 5.4. Grain buyers 22 5.5. Farm lobby groups 22 6. Conclusion 23 Appendix A: Dairy company policies on GM ingredients 23 Endnotes 24 Introduction “Over the past decade, corporate and government managers have spent millions trying to convince farmers and other citizens of the benefits of genetically-modified (GM) crops. But this huge public relations effort has failed to obscure the truth: GM crops do not deliver the promised benefits; they create numerous problems, costs, and risks; and Canadian consumers and foreign customers alike do not want these crops. It would be too generous even to call GM crops a solution in search of a problem: These crops have failed to provide significant solutions, and their use is creating problems— agronomic, environmental, economic, social, and (potentially) human health problems.” Canadian National Farmers Union (2005)1 In 2003, the Federal Office of the Gene Technology Regulator (OGTR) approved the commercial release of Bayer CropScience’s InVigor® genetically modified (GM) canola and Monsanto Australia’s Roundup Ready® GM canola. In 2004, the Governments of the canola growing states introduced moratoria on the commercial growing of GM food crops because of concerns within industry, the farming sector and regional communities about the impact of these crops on markets. The concerns that led to the introduction of the moratoria include liability and insurance issues, problems with segregation and cross contamination and export market sensitivities.2 In the four years since the moratoria were introduced these concerns have proven highly justified. There have been no independent trials to demonstrate any agronomic benefits associated with GM canola. Furthermore, GM contamination scandals have plagued countries that have adopted GM crops, such as the US, which recently suffered the largest financial and marketing disaster in the history of the US rice industry due to US rice supplies being contaminated with LL601 (“Liberty Link”) – a variety of GM rice owned by Bayer Crop Science. Total costs incurred around the world as a result of this GM contamination incident are estimated to be up to $1.285 billion.3 This example and others around the world, have resulted in hundreds of millions of dollars of lost export revenue and and costly litigation. Segregation of non-GM canola in Canada has failed, leading to the collapse of its non-GM and organic canola industries. Farm incomes in Canada have plumetted since the introduction of GM canola and Canada has entirely lost its canola seed exports in Europe. Furthermore, consumers in Australia, and major export markets such as Europe and Japan, remain resolutely opposed to GM food. Recent studies questioning the science behind GM and the safety of GM food have only served to heighten consumer concern on the issue. This report looks at the key issues that need to be resolved before the States can consider lifting their GM food crop moratoria. These include agronomic, market and coexistence issues. The report also examines the vested interests behind the promotion of GM crops. 1. Agronomic issues There has been much talk in Australian rural media about how GM crops can increase yields and profitability; reduce fuel use, tillage and herbicide use; and that they are a necessary tool to deal with drought. However there is no independent evidence to back up any of these claims. Furthermore, many of the purported benefits of GM crops, such as improved weed control and drought tolerance, can be developed using non- GM breeding techniques. For example, last year Victorian scientists developed non-GM drought tolerant canola user marker assisted selection which should be available to farmers this year.4 1.1 Weed management “Agronomically the only difference between Roundup Ready canola and other varieties is that glyphosate does not kill it but a range of other herbicides do.” Nufarm business manager Kylie Calderwood, Groundcover, Nov Dec 2007 issue. GM canola was commercially released in Canada in 1995 and was adopted widely as, unlike Australia, herbicide resistance was a ‘new tool’. GM chemical resistant canola offered similar benefits to Australian non-GM herbicide tolerant canola, resulting in superior weed control options; reduced tillage due to adoption of minimum till; and increasing options to plant canola early. These benefits are not specific to GM. The two types of GM canola approved for commercial planting in Australia - Monsanto’s Roundup Ready canola and Bayer’s Invigor hybrid canola - are both herbicide tolerant varieties. Herbicide tolerant (Ht) crop varieties have been developed to withstand an application of a specific chemical not usually used after the crop is planted. Genetic modification is not necessary to develop herbicide resistant crops and there are several non-GM herbicide tolerant varieties available in Australia. Non-GM canola varieties resistant to triazines (simazine/atrazine) and Clearfield (imidazolinone) are already widely used in Australia. The current GM herbicide tolerant (HT) varieties are genetically engineered to deliver crop tolerance to either glyphosate (Roundup) or glufosinate ammonium (Liberty) and are designed to reduce the yield losses associated with weed infestation. However, Australian farmers already have a number of non-GM weed control options, with many chemicals currently available to control weeds in crops at knockdown, pre and post emergent stages. If the weed control offered with GM crops is no better than conventional alternatives, there will be no advantage in adopting GM canola. In Canada GM canola varieties resistant to glyphosate and glufosinate ammonium are widely used, whilst in Australia non-GM herbicide tolerant canola varieties are widely grown. Canada has very different growing conditions than Australia. The growing season is far shorter requiring a more urgent weed control, rather than a continual weed control offered by chemicals with residual control. Off-season weeds are also controlled by snow and therefore unwanted off- season volunteers do not need controlling. While ryegrass and radish are a major weed problem in Australia, neither is a problem weed in Canada. This is very relevant to Australia, considering the chemical control being offered with GM herbicide tolerant canola when compared with the chemical used on non-GM herbicide tolerant canola. There is no alternative post emergent control for the weed radish and while glyphosate is not very effective on radish, glufosinate ammonium does not control radish at all.5 Glufosinate Ammonium also does not control turnip and there are no post emergent options for turnip control. Turnip weed infestation can result in the product being rejected or price penalties as high as $4/tonne for every seed found in the sample taken.6 In Australia, ryegrass is constantly germinating and therefore farmers tend to use either a residual control or multiple herbicide applications. Unlike triazines and imidazolinone (used on non-GM chemical resistant canola), neither of the herbicides used on GM crops have residual weed control.7 Glufosinate ammonium and glyphosate kill weeds by contact and will not control weeds that continue to germinate. If using a single application of glyphosate or glufosinate ammonium on weeds known for multiple germinations (e.g. ryegrass), it is usually necessary to delay spraying until as much as possible of the weed population has germinated. However, any delay of uncontrolled weed growth for early germinating weeds will lead to crop losses and yield penalties. Alternative weed management strategies include multiple chemical applications, additional residual herbicides and/or mechanical weed control prior to sowing.8 If weeds are not adequately controlled using chemicals with no residual activity, chemical use will increase or yield penalties due to weed burden will occur. 1.1.1 Glyphosate resistance Glyphosate is commonly used in Australia as it is the most popular weed knock-down chemical used. Due to its overuse, reports of glyphosate resistant weeds have been increasing in Australia and some farmers integrate a range of resistance management options to avoid its overuse and to control resistant weeds with alternative chemicals. The increased use of glyphosate that would accompany the introduction of GM crops in Australia will only make these glyphosate resistance problems worse. This problem has already occurred in the US and Canada.9 Although a resistance management strategy has been introduced as part of the Roundup Ready crop management proposal, this will not be a compulsory condition of use as it will not be policed. Increasing weed resistance to glyphosate will not only reduce the likely success of this GM trait but will reduce the effectiveness of this very popular chemical requiring additional chemical additives to achieve the same level of weed control.10 Not only will additional chemicals be required to manage resistant weeds. Since glyphosate is the most popular knockdown chemical - additional chemicals will have to be mixed with glyphosate to control unwanted Roundup Ready volunteer GM plants, since glyphosate will not control them.11 1.2 Yields 1.2.1 Australian trial data No independent trials have been conducted in Australia to assess any potential yield gains associated with GM canola. Bayer and Monsanto have both failed to enter their GM canola varieties into national seed listing trials in order that they can be independently assessed. In 2005 Ian MacDonald, the New South Wales Agriculture Minister, argued that before the moratorium is lifted “it is important that independent, small- scale agronomy trials of GM canola occur prior to larger-scale segregation trials being conducted to address marketing issues.”12 This work has still not been completed. In 2003, the New South Wales Government approved field trials of Monsanto and Bayer’s GM canola in order that their agronomic performance could be evaluated. However, both companies pulled out of the trials with Bayer citing ‘poor seasonal conditions’ as the reason.13 In 2007 the WA Government also announced plans to conduct independent trials, but Bayer and Monsanto have refused to release the seed for the trials.14 There is increasing evidence that GM crops cannot manage stress conditions, such as drought, as well as non-GM crops can.15 This could explain Monsanto and Bayer’s refusal to undertake field trials under drought and to release data from trials subject to drought conditions. The biotechnology industry has deployed a number of techniques in Australia to make its trial results appear more favourable to GM crops. These include: · Expressing yields as a percentage rather than an actual yield. This prevents farmers from making comparisons. · Choosing weed free sites and not applying the companion herbicide (e.g. glufosinate, glyphosate) to GM Ht crops to avoid the yield penalty normally associated with Ht crops. · Selectively removing data which could determine adverse performance during dry conditions. · Sowing non-GM canola twice as thickly as the GM canola so that the yield is adversely affected. However table 1.2.1. shows that, despite the use of these tactics, in Monsanto and Bayer’s own trials, yields in GM varieties are not significantly different to those obtained using non-GM herbicide tolerant varieties. Monsanto and Bayer’s own studies suggests that there may actually be a substantial yield penalty associated with GM canola. Despite Monsanto adding the Roundup Ready gene to ‘elite varieties’, the best Australian trials of Roundup Ready canola yielded only 1.055t/ha – at least 16% below the national average of 1.26t/ha. Reduced yields have also been widely reported in Roundup Ready soybeans which have been attributed to the GM process.16 Despite Bayer claiming exceptional yields associated with its Invigor canola, trial results indicate that GM Invigor canola yields the same as triazine tolerant varieties and less than non-GM hybrids. Although hybrids are produced using non-GM techniques with an intention to produce more vigour and hence higher yields, the hybrid technique used by Bayer Cropscience is a GM technique. The OGTR explained in the final risk assessment of this crop “The progeny are expected to have enhanced agronomic performance, otherwise known as ‘hybrid vigour’.” However, the OGTR then stated that InVigor hybrids had “...20pc less vigour than a conventional hybrid variety...”17 1.2.2 The Canadian Experience The yields of GM canola growing countries (Canada and the US) do not exceed yields of non- GM canola growing countries (e.g. the EU and Australia). As Figure 1.2.2. demonstrates, while it is more common in Australian for yields to be adversely impacted by seasonal variation such as drought (eg. 2002) or a late start to the season (snow provides a moist start in Canada), there is not a significant variation in yields between the two countries.18 As Figure 1.2.3 shows, Canadian canola yields from 1965 to 1994 increased by an average of 0.2 bushels per acre per year. This was the result of selective breeding and improvements to farming techniques. GM canola was introduced to Canada in 1996, however from 1995 to 2004, yield only increased by an average of 0.1 bushels per year. Those who claim that GM crop technologies positively contribute to yield - either directly or indirectly - have no data to prove that assertion.19 1.2.3 Further research requirements Before any yield benefits can be claimed for GM varities in Australia, independent research needs to be conducted comparing the yields of: 1. GM hybrids with non-GM hybrids; 2. GM herbicide tolerant varieties with popular non-GM herbicide tolerant varieties; 3. Roundup Ready varieties with the same variety without the Roundup Ready gene; 4. GM and non-GM varieties in fields with heavy Table 1.2.1: Yield comparisons of GM canola trials in Australia 2001 2002 2003 Comments IT/Clearfield (Conventional) 1,144 Trifluralin + OnDuty® + Hasten® + Lontrel® Roundup Ready (GM) -A 1,055 Two applications of Roundup -B 977 One application of Roundup -C 966 Trifluralin + Two Applications of Roundup Source: Monsanto, as reported in Foster (2003), cited in ACIL Tasman (2007) New South Wales, Victoria, South Australia InVigor 40 (GM) 109 122 Hyola 60 (Conventional) 120 112 Source: Bayer CropScience website, as reported in ACIL Tasman (2007) Western Australia InVigor 40 (GM) 110 Surpass 501 TT (Conventional Triazine tolerant) 110 Source: Pike and Clarke (2004), as reported in ACIL Tasman (2007) weed infestation (including radish) versus those with light weed infestation; 5. Non-GM varieties and GM varieties with no pre-emergent weed control (it is incorrectly claimed that pre-emergent control is not required, however it is recommended by the biotech companies). 6. Non-GM varieties and GM varieties with none/ one/two applications of chemicals to assess difference in yield penalties associated with chemical application. 1.3 Costs Profitability can not be determined without integrating the costs of using a product. 1.3.1. Direct costs The average additional costs of technology for GM canola in Canada was estimated by PG Economics to be C$44.03/ha. The technology costs have steadily increased since introduction and breaches of contractual conditions are vigorously pursued. ............................................................................................ .............................. ...... ...... ...... ...... ...... ...... ...... ...... ...................................................................................................................... .............. .................................................... .............................................. ........................ ................................ .... .... .... .... .. .. ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ ........ .................. .................. .................. .................. ...................................................................................................... Table 1.3.1. compares the cost of seed and herbicde for GM and conventional canola varities. In a recent report, Nuffield scholar Andrew Broad estimated that GM Roundup Ready canola would cost $27.82 per hectare more to grow than conventional canola. He claimed that this would be compensated for, if there was a yield gain of 4%, not taking into account the additional costs of segregation and identity preservation.22 However, there is no evidence that GM canola actually increases yields. Monsanto has refused to release contract details, an estimated costing of Roundup Ready canola, or the associated user fee applicable to Australian conditions. The costs associated with using GM Invigor canola are significant and a substantial improvement in yield would be required in order to counter these additional costs. In effect, farmers would be required to pay more for a variety and chemical application that is less effective than the varieties that we currently grow. Australia has experienced severe yield penalties due to regular drought conditions. This means that Australian farmers are far more vulnerable to economic loss if average costs are significantly higher. As early as 2003, the Grains Council of WA Farmers debated if farmers would accept Roundup Ready royalties being deducted as an end-point royalty. No resolution was reached, but this arrangement would pose serious problems to non-GM farmers. Tests to detect Monsanto’s Roundup Ready gene will be used at delivery points and are accurate at detecting Roundup Ready contamination from 0.5% or above. When the Network of Concerned Farmers sought assurance from the NSW advisory council that Monsanto would not deduct their royalty from a non-GM canola growers payments if contamination was above 0.5%, the response was “Farmers must trust Monsanto”. 1.3.2. Additional costs Additional costs and inconveniences to farmers growing Roundup Ready canola also need to be assessed. For example Monsanto’s Resistance Management Plan, which has since been removed from its website, recommended that “farmers seek to voluntarily leave Roundup (or Glyphosate) out of their herbicide program for at least one year in the next three years following Roundup Ready canola.” Rural Industries Research and Development Corporation (RIRDC) research also indicated the following should be deducted from any net economic benefit associated with the adoption of GM crops: · The net negative environmental risks associated with producing GM crops; · Additional costs of segregation and identity preservation through the supply chain; · Discounting and/or loss of market access abroad for conventional counterparts to those specific crops which may contain GMOs; and · Discounting and/or loss of market access abroad for other farm products because of what GM adoption does for Australia’s generic reputation as a ‘clean, green, safe food’ producer.23 GM crops and the associated patents and contractual agreements also prevent farmers from replanting our own seed. Table 1.3.1: Cost comparison between GM and conventional canola21 Invigor (GM) Roundup Ready (GM) Conventional Seed $16/kg (must buy new seed every year) $12/kg (must buy new seed every year) .50c/kg (replant) to $4.30/kg if buying new seed Herbicide Liberty $72/ha (2X 2l/ha @ $18/l) Roundup $18.76/ha (2 applications) Atrazine $28/ha (2X 2l/ha @ $7/l) 1.4. Profitability “Farmers’ profits haven’t just disappeared; they’ve been taken. The farm crisis didn’t just happen; it was caused. The family farm isn’t dying; it’s being killed. And the perpetrations of this destruction are the agribusiness corporations who are using their market power to extract profits that would otherwise end up on our farms. Farmers can’t make a living because agribusiness giants insist on making a killing.” Canadian National Farmers Union (NFU) 200524 Even if GM canola did have the potential to increase yields, as the Canadian National Farmers Union point out “any initial economic benefits will be quickly outweighed as farmers are drawn further under corporate control.”25 As Figure 1.4.1. shows, net farm incomes in Canada have plummeted since the introduction of GM canola. The last five years in Canada have been the worst five years of realised net farm incomes in the history of the country.26 At the same time, we have seen corporate agribusiness “earn” record profits. In Canada, corporations have captured all of the profits associated with GM and farmers have become increasingly dependant on high-tech seeds and chemicals. The knowledge and power has shifted from the farmers to giant agri-business corporations such as Bayer and Monsanto. And as the power has shifted, so have the profits.27 Companies such as Monsanto have gone to great lengths to ensure that they capture the full benefits of the introduction of GM crops. Monsanto spends over US$10 million annually investigating, intimidating, pressuring, and suing farmers. In the US, Monsanto has a staff of 75 employees devoted to these pursuits and the company also contracts dozens of lawyers from outside firms. It has sued for, and won, judgements as high as US$3 million and several more over $1 million.29 According to the NFU, while the net income numbers in Figure 3 represent farmers in general (not just canola farmers), the net income trend is representative of the experience of canola farmers. If anything, the trend is optimistic, because, if it were available, data on net income from canola production would produce a graph line that would fall much more precipitously than the line in Figure 3. The profitability of canola production, like that of crop production in general, has crashed over the past decade.30 Data from Statistics Canada shows that small and medium-size Canadian farms now rely on .................................................................................................................. .......... ................ ................ .... .............. .............. .............. .............. 192619361946195619661976198619962006 ...................................................................... ................ ................ ........ ................ .................. .................. ................ .................... off-farm income for approximately 90% of their total income; large farms rely on off-farm income for over half (52.1%) of their total income; and even Canada’s largest farms, depend on off-farm income of between 25.9% and 33.5% of their total income.31 The NFU states that a combination of government subsidies, increased debt loads (now exceeding C$52 billion), and off-farm income are the main factors that allow farming to continue despite sub-Depression level net incomes.32 According to the NFU, Canadian subsidies work out to about A$150 per ha of cropland.33 This year ABARE estimated that over 1million ha in Australia will be sown to canola this year.34 If the Australian Federal Government were to subsidise Australian canola farmers to the same extent, it would cost $150 million a year. The NFU also estimates that in order for most Canadian farmers to take a “wage” from their farms, current subsidies would have to nearly double. In other words, if the Australian Government wants GM canola farmers to stay in business, it needs to be prepared to subsidise them to the tune of over $300 million a year. 2. Market issues 2.1 The global canola market As Table 2.1.1. demonstrates, the vast majority of the world’s canola is non-GM. Canada is the only major canola producing country to have adopted GM canola and its farmers are heavily subsidised. If Australia adopted GM canola, without subsidising its farmers, it would be the first major canola producer in the world to do so. Europe decided not to adopt GM canola because of concerns about the biodiversity impacts of GM canola and because of widespread community opposition to GM crops. Table 2.1.1: Key characteristics of the world canola seed market Producer Percentage of world production35 GM canola adopted? European Union 32 No China 27 No Canada 18 Yes India 15 No Australia 3 No 2.2 Market access An ABARE research report concluded that “a range of market access restrictions related to GM products means that it is easier to trade non-GM grains in the current market environment than it is to trade GM grains.”36 In the early and mid-1990s, before the widespread introduction of GM canola, Canada sold much of its canola crop to the EU. The EU took 16% of total Canadian exports in 1993, 32% in 1994 and 25% in 1995. However, as a result of the introduction of GM canola, Canada entirely lost its canola seed exports to Europe. Over the past decade, China has become a major buyer of Canadian canola. However, China is a low-price market, whereas the EU was a premium- price market. Today, Canadian canola prices, adjusted for inflation, are at a record low. It is because of the introduction of GM varieties and attendant market loss that canola prices have fallen.37 USDA figures indicate that high levels of carry- in stock (stock not sold immediately) is afflicting Canadian GM canola producers, indicating an inability to immediately sell their GM canola into the world’s markets. While Department of Agriculture figures for Australian carry-in stock of canola are not available, there is no evidence that Australia is having similar problems. 2.2.1 Export markets As can been seen from Figure 2.2.1, Australia’s most important export markets for canola are Japan and Europe, accounting for 41% and 38% of exports in 2006.38 The EU and Japan have both instituted strict rules regarding the import and labelling of GM products, reflecting the strong and continuing resistance to GM in these countries.39 ............................................................................................................................ .... ...... ........................ ................ .................... .... .......... ...... .......... .... .................... .... .......... ...... Japan Japan, in particular, is an extremely important market - receiving 50% of Australian canola seed exports between 2001 and 2004. Consumer resistance to GM is extremely strong in Japan, and the recent scandal regarding GM canola contamination around Japanese ports has further heightened fears. This year a delegation of Japanese consumer groups visted Australia and delivered a petition signed by 151 consumer organsations, representing 2.9 million Japanese consumers, urging the State Governments to extend their GM food crop moratoria.40 If GM canola is commercialised in Australia the negative consequences for Australian grain markets could be significant. The WA inquiry observed that “Australia was able to secure greater market access because it was producing non-GM canola”41 According to Perry Gunner from ABB Grain, Japan’s interest in buying Australian canola is growing. He states that there are increased opportunities to sell canola there because of Australia’s GM free status.42 It was recently reported that Canadian canola exports to Japan will be down this year due to competition from Australia.43 Several Japanese companies specifically market Australian GM free canola oil and attract premium prices for their products. Several Japanese companies have expressed concerns about GM crops and a number are now sourcing their canola from Kangaroo Island at premium prices to ensure a non-GM product.44 Uni Co-op reportedly switched from Canadian to Australian canola in response to consumer demand for GM free product. Similarly, Shutoken Co-op has indicated that it wants GM- free canola. Organic export companies have also noted that export opportunities for organic canola oil are not being captured due to major immediate supply shortages.45 Europe “If the EU does have to import this year, its strict guidelines on non-genetically modified imports would put Australia at the top of the list as it was last year. This resulted in the bases component of our prices reaching unprecedented levels, delivering high prices to growers fortunate enough to grow a crop last year.” Canola boom prices for lucky ’06 growers by Mark Martin. (The Land August 7, 2007) GM canola was introduced to Canada in 1996, and by 1998 Canada had entirely lost its sales of canola seed to Europe. The EU is a growing market for Australian canola, accounting for 38% of Australia’s exports in 2006. The increase in demand is driven largely by the biodiesel sector, and the EU is sourcing canola from Australia precisely because of its non-GM status. The seed is crushed and the meal is used as livestock feed, which has to be labelled if it is GM. According to the Canola Council of Canada, if it weren’t for the EU’s GM restrictions, between 300-400,000 tonnes of Canadian canola could have been exported to the EU in 2005-2006. Furthermore, the Council has estimated that the level of demand could easily double in 2006-2007, making the opening of EU borders to Canadian canola an important priority for Canada. Whilst some Canadian canola oil has been making its way to Europe through third parties such as Dubai and China, where the Canadian seed is crushed and the oil shipped to Europe, the Council has said that the economics of this are unfavourable.46 Clearly Australia has a important marketing advantage over Canada when it comes to serving EU markets. According to the Canadian Canola Council “despite the recent World Trade Organization Panel ruling on the approval and marketing of biotech products in the EU, it could be some time before genetically modified (GM) canola is welcome in the EU”.47 A recent ABARE report has noted that the unintended presence of GM canola in Australian shipments could be a problem if the EU becomes a larger and more regular importer of Australian canola, because of the EU labelling threshold of 0.9%.48 Based on the current trend towards increased demand for biodiesel, there is an extremely high probability of this happening. 2.2.2 Domestic markets The domestic market accounts for approximately 20-30% of total canola seed production (depending on the year), making it the third largest market for Australian canola. The two largest buyers are Goodman Fielder and Unilever, both of which have a policy to avoid the use of GM derived canola oil. Peter Margin, the CEO of Goodman Fielder, recently wrote to the State Premiers urging them to extend their moratoria on GM food crops.49 Coles also recently spoke out against GM food at a recent Parliamentary forum on the topic. When asked what Coles’ position was, Coles representative Chris Mara stated that “Coles listens to our customers and over 90 per cent do not want GM ingredients in their food and Coles whole private label range of ‘Smart Buy’, ‘You’ll Love Coles’ and ‘Coles Finest’ exclude all GM ingredients in response to customer concerns”.50 2.3. Consumer opinion Consumer resistance is the strongest economic argument for remaining GM free. As the Australian Wheat Board has noted, “Legislation might allow GMs but that doesn’t mean our customers want them.”51 As the Canadian National Farmers Union puts it: “While the benefits are questionable, risks and costs are real. Consumers are rejecting GM foods. Markets in Europe, Japan, and elsewhere are closing and domestic markets are likewise threatened. This is driving prices down. Closing markets and falling prices threaten to overwhelm any small, short-term economic benefits that GM crops or livestock may offer. Further, the proliferation of some GM crops has effectively deprived many organic farmers of the option to grow those crops.”52 There is no evidence of waning consumer opposition to GM crops in either Australia, or our major export markets such as the EU and Japan. 2.4 Uncertainty around the safety of GM food In June this year, new research published in the leading scientific journal Nature revealed serious flaws in the science behind genetic engineering. The research calls into question the assumption that each DNA sequence can be isolated and has its own function. Instead, genes operate in a complex network where they react, interact and overlap with each other in ways that are still far from being understood. This new research shows that genes cannot be considered isolated units - nor can they be controlled. The research raises serious questions about the safety of GM crops.53 This incomplete understanding of genetics explains why so many unexpected effects have occurred in GM feeding studies. For example, a recent peer reviewed study found evidence of liver and kidney toxicity when rats were fed an approved GM maize variety (MON863).54 Similar effects were observed when Monsanto fed its GT73 Roundup Ready canola variety to rats. The rats showed a 12- 16% increase in liver weight, yet Food Standards Australia New Zealand (FSANZ) still rubber stamped the canola as safe.55 In 2005 CSIRO abandoned a decade-long project to develop GM peas after tests showed they caused allergic lung damage in mice.56 The allergic reaction is believed to have been caused by unexpected changes to the protein when it was expressed in the pea. FSANZ typically uses proteins expressed by bacteria in its toxicity studies, rather than proteins isolated from the plants they are expressed.57 This allergenic pea would therefore have been approved for human consumption had it gone through FSANZ’s normal testing regime. 2.5. Premiums As Table 2.3.1. shows, there is clear evidence that prior to GM introduction, Canada maintained a constant premium over Australian canola. By 2002, Australian non-GM canola gained a consistent premium over Canadian canola. The average price penalty suffered by Canada was Aus$63.04. Table 2.5.1: Canadian and Australian canola prices ($Aus) $Aus/tonne Australian Canadian Difference Jan 91-Jul 02 343.73 383.90 + 40.17 Aug 02-May 07 411.30 388.43 - 22.87 $63.04 Source: Adapted from data provided by Max Foster, ABARE As illustrated in Figure 2.3.1, in 1998, the difference between Australian and Canadian canola prices was about $70 a tonne in favour of Canada. However, by May 2006 Australian prices had exceeded Canadian prices by some $50 a tonne.58 It is difficult to determine how much of this price premium is due to Australian canola’s non-GM status, since the information is commercially confidential. However a WA Department of Agriculture report observes that premiums for non- GM canola exist in both Japan and Europe. 59 Premiums of $12 to $14 per tonne have been reported in Europe, and Japanese MAB statistics for 2004 reported an average 5% premium for Australia’s canola over Canada’s canola.60 Portmann and Tucek have noted that it is unlikely that the real price differential will be seen until there is a shortage of non-GM product.61 2.6. Impacts on other industries Although canola is a relatively minor crop, the introduction of GM canola has the potential to impact negatively on all farming industries. GM canola seed can easily contaminate other grains and there is market sensitivity to GM canola in other grains, such as barley and wheat, and stock feed. Farmers are signing declarations guaranteeing their stock has not been fed GM material, their grain is not GM and their honey has not been obtained within 5km of a GM crop. Both AWB Limited and the Australian Barley Board (now ABB Grains), key grain marketers in Australia, have expressed concerns over the commercialisation of GM canola in Australia because of the possibility that unintended presence of GM canola seed in wheat and barley shipments would jeopardise some of their markets. Similarly, numerous marketers of Australian livestock products have claimed that there is a market advantage to not feeding GM material to livestock.62 Eckard Huebl the Managing Director of the Tatiara Meat Company, Australia’s largest lamb exporter, recently wrote to the State Premiers urging them to extend their GM canola moratoria. He stated that the Australian prime lamb market would suffer if it lost its ‘GM-free’ marketing edge.63 Canola meal is commonly used as stock feed in the dairy industry which is extremely sensitive to GM contamination. Consumer concern regarding the use of GM stock feed, both in Australia and in important export markets such as Japan and Europe, has resulted in the majority of Australian dairy suppliers implementing non-GM policies. These companies include: Attiki National Foods B.-d.Farm Paris Creek Norco Co-operative Bega Cheese Parmalat Australia Dairy Farmers Snowy Mountains Organic Dairy Jalna Dairy Foods Tatura Milk Industries Lactos Warrnambool Cheese & Butter Factory Murray Goulburn Co-operative A full list of these companies policies regarding GM ingredients can be found in Appendix A. Australian farmers are being assured that they will ...... ...... ...... ...... .. .... .... .... .... ...... ................................................................................ ........................................................................................................................ ............................................................................................ .......................................... ........ have a choice of whether or not to grow GM crops and that coexistence will be possible. However coexistence plans have focussed on providing a path to market for GM crops with scant detail on how the path to market for non-GM crops can be maintained. Coexistence plans are being approved without the approval of the non-GM sector and these coexistence plans have burdened non- GM farmers with the costs, the liability and the responsibility for keeping GM from contaminating our non-GM product. This is not approved by non- GM growers and must be addressed prior to any consideration of the commercial release of GM canola. 3.1 Creating a path to market for GM crops There is no segregation problem for the GM growers or GM produce as there is no contamination issues relevant to GM produce being contaminated with non-GM produce for market. Industry reference to the definition ‘canola’ accepts GM canola while ‘non-GM’ or ‘GM-free’ becomes a niche market definition. GM canola is to take over the existing supply chain from non-GM canola allowing farmers to deliver to canola delivery sites.64 3.2 Maintaining a path to market for non-GM crops Co-existence and choice has been promised by government and industry but there is no intention to deliver it. Every farmer that has viewed the detail is aware that the ‘coexistence’ procedure proposed would be too onerous for the non-GM grower to comply with. Very little detail has been given to industry regarding the path to market for a non- GM product but those non-GM growers who have investigated the proposal do not approve of the plans proposed. Peter Portman from CBH (the largest grain handler for export in Australia) has been reported as saying “CBH believed we would segregate for only a couple of years and only then for political reasons because there is no premium.”65 3.2.1 Coexistence Principles Coexistence protocols were prepared by the GM industry and impose all the costs, liabilities and responsibilities for keeping GM from contaminating non-GM produce on to the non-GM grower who have no avenue to oppose the coexistence plans. Basically, contracts are to control the liability associated with GM contamination and non- GM farmers must ensure the produce delivered complies with the statements made (i.e. Non-GM or GM-free must have no GM or a stated maximum contamination tolerance level).66 A typical contractractual agreement that a grower must sign prior to delivering grain to the storage and handler follows.67 This clearly ensures that the non-GM farmer is liable for all consequences (recall etc) that arise from contamination of a non-GM product with GM. Contractual Agreement 1. Growers declaration: I/We hereby represent and warrant that: … (d) the Grain does not include any genetically modified grain;… (some contracts have been amended to 0.9%) 2. Growers indemnity: I/We agree… (a) to indemnify and keep indemnified (*company) against:… ii) all actions, claims and demands which may be made or instituted against (*company)… Arising howsoever out of or as a consequence of any of the representations or warranties contained in this form being false, misleading or deceptive;” In order to sign the required declaration when delivering grain, a test should be available. However there is no workable field test available at the point of delivery to test for Bayers Invigor canola. In order for Bayers field test to be considered accurate, contamination must be above 9% but this level of contamination is well above what is acceptable to a non-GM market. 3. Coexistence issues 3.2.2 Obligations of non-GM farmers under the proposed scheme Under the coexistence plans prepared by the GM sector and agreed to by “industry”, A non-GM farmer must: · Research how much, if any, GM contamination is accepted by various buyers and calculate what appropriate GM buffer zone is required to prevent contamination to comply with the contractual guarantees demanded. Produce grown in this buffer zone is to be kept completely separate to the non-GM produce as it is considered to be GM. This GM area will require fencing to prevent stock spreading seed and will require separate machinery and storage and/or extremely rigorous cleanout regimes. This buffer zone could be as wide as 3km to prevent contamination. · Adopt a rigorous identity preservation (IP) system to comply with market requirements. I.P. systems may vary according to markets but a standard IP system means documentation must be made at every stage of handling, including production, distribution, transportation, processing from grower to manufacturer. Estimates by ABARE show the additional costs range between 5-15% of the gross value of the product but would be price prohibitive if an accepted level of contamination is not tolerated. · Non-GM farmers must take every step to avoid contamination. The coexistence principle is based on 0.9% contamination and “Where an alternative standard (ie. lower threshold for non-GM canola) is required… appropriate management strategies… should be incorporated.” No mention is made as to what the appropriate management strategy is and if it is workable. · Non-GM farmers can not replant their own seed, they must buy new certified seed every year and pay for the appropriate testing to ensure this seed is GM-free. · Non-GM farmers must avoid planting crops where flowering may occur at the same time, however, canola normally flowers from July to October and it would be impossible to grow a canola crop that does not flower at this time. · Prevent seed, dust and plant material from GM crops contaminating non-GM crops and produce. · Contact the GM company if contamination is found and, at the non-GM growers expense, follow the recommended contamination eradication procedure advised. · Provide a separate supply chain that can segregate efficiently. · Sign agreements that exempt the supply chain for causing contamination and accept liability for any recall and contamination clean-up.68 3.2.3 Segregation “GM crop agriculture is incompatible with other forms of farming—non-GM and organic, for instance—because GM crops contaminate and because segregation is impossible.” Canadian National Farmers Union (2005) The introduction of GM canola would require the implementation of segregation and identity preservation (IP) in order to serve market demand. This would be extremely difficult, perhaps impossible, and extremely costly. Initial attempts to segregate non-GM canola in Canada have failed and it is now nearly impossible to grow non-GM canola in most of Canada. The proliferation of GM canola, uncertainty over seed supply purity, and the risk of contamination from windblown pollen mean that non-GM farmers have little certainty that their canola will be free of GM seeds. If these farmers try to grow non-GM canola, they face huge risks that their products may be rejected by buyers, possibly when those products reach overseas ports.69 Segregation advocates point to organic growers who successfully segregate their crops from the rest of the food supply. However such comparisons fail to appreciate how bulk conventional segregation systems work. Keeping the general pool of product from contaminating a small subset is a very different task to trying to keep grains separate within the commercial system, with its huge shared bulk-handling facilities, intermixing, port blending and numerous delivery points – to say nothing of on-farm contamination..70 A Western Australian Parliamentary inquiry into genetic engineering formed the view that “contamination of non-GM crops by GM crops is inevitable, segregation is not practical and that identity preservation (IP) can be achieved, but at a significant cost.”71 The WA inquiry found that “extra costs will arise with an IP system due to the additional work involved throughout the supply chain, including in growing, handling, storage, transport, processing, cleaning and administration. Certification and/or testing of the GM status of bulk commodities in the marketing chain and labelling will also contribute to the additional costs.”72 Europe currently has a 0.9% threshold for GM contamination. However this is for “adventitious or technically unavoidable presence”, not a legislated tolerance threshold. A ‘zero tolerance’ segregation system would therefore be required to serve EU markets. The Australian Bureau of Agricultural and Resource Economics (ABARE) has noted that, “zero tolerance in an importing country for contamination with GM canola would make it very difficult, if not impossible, for a country producing a mix of GM and non-GM canola to address that market.”73 3.2.4 Contamination Based on the North American experience, it is virtually guaranteed that a GM/non-GM segregation system will fail because the seed supply is already contaminated. Canadian researchers tested 33 samples of certified non-GM canola seed and found that 32 samples were contaminated with GM varieties—and three of those samples had contamination had levels above 2%.74 Another study in the US found that virtually all samples of non-GM corn, soybeans, and canola seed were contaminated by GM varieties.75 Widespread contamination is not surprising. A recent UK study found that GM canola cross-pollinated with non-GM canola more than 26 km away.76 Sources of on-farm contamination include: Pollen: while many studies have been done regarding pollen carried by bees (Reiger et al), little mention is made regarding the increased pollen transfer risk due to wind or animal transfer. Wind: seed and pollen can be distributed by wind and it is not uncommon to see swaths blown some distance due to willy willies or strong winds. In some cases (2002) whole canola crops have been blown away after swathing. Flood: Canola seed can be transferred significant distances after rain and large sections of planted crop or seed can be relocated during flood. Farm operations: seed transfer can occur during all farm operations, particularly during harvest as it is impossible to clean out a harvester without leaving approximately 6kg seed in the machine.77 Seed remaining in the paddock: Due to shattering and harvest operations, a significant amount of seed remains in the paddock after harvest of the crop. Animals: Animals transfer pollen, seed and branches of seed during normal grazing and this can be dropped or excreted in faeces. Animals include kangaroos, birds and stock. It is normal practise for farmers to graze stock after harvesting a canola crop and stock can transfer seed throughout the farm or to non-GM farmers farms by accident or when selling stock. Storage and Handling: Seed can easily be transferred by storage and handling through spillage, augers, human error and it is not possible for farmers to clean out equipment totally. Transport: It is a common saying among farmers that if a truck can not hold water, it can not hold canola seed as the seed is so small and leaks out of the smallest hole or gap in the back of trucks. Farmers try to prevent large losses of canola by taping up gaps, however it is not possible to completely prevent leakage. The result of this leakage is the common sight of canola plants growing along the roads where canola has been carted. GM canola contamination is already widespread in Japan, as a result of canola imports from Canada, despite GM canola not actually being grown in the country.78 Seed cleaning: Canola seed is the most difficult seed to remove from machinery as it lodges in places that do not normally hold seed (behind belt buckets etc). If a non-GM grower presents seed to be cleaned, there is no field test to check if there is contamination and that this contamination would be transferred to other uncontaminated seed lines. Planting contaminated seed: Based on the Canadian experience, there is no doubt that non- GM canola seed will be contaminated in Australia, however non-GM growers are being promised a choice and a path to market for non-GM produce. While farmers are expected to tolerate a level of GM contamination, it is not accepted by markets. 3.3 Liability According to the Australian Government, non-GM farmers have little or no legal recourse against the GM industry for economic loss caused.79 Legal advice gives a slim chance of recourse against the GM company or the GM farmer, providing preparation has been undertaken to ensure the company and/or the farmer concerned is aware that contamination is not accepted. In the event that the State moratoria on GM food crops are lifted, the State governments - charged with assessing economics - should be held liable for any loss or damage caused if concerns are proven to be correct. 3.4 Industry preparedness and acceptance If non-GM growers are expected to accept the economic loss associated with the introduction of GM crops, GM crops should not be introduced. Industry is not prepared - since non-GM growers do not approve of the management plans. Decisions of industry preparedness should not be in the hands of those with a vested interest in the commercial release of GM crops. There should be a requirement for stakeholders to declare any vested interest in GM technology. These ‘stakeholders’ include:- all research and development organisations, Agrifood Awareness, The Insitute of Public Affairs, Graincorp, Oilseeds Federation, Crop Life Australia, individuals and lobby groups. These organisations are predominately the source of information for growers and due to their financial interest in the technology, the information is subjective and carefully filtered. The following key issues need to be addressed in order for industry to accept GM crops: · Accurate and balanced data needs to be prepared on a case by case basis depicting the benefits, alternatives, risks and risk management strategies needed for GM crops. The data needs to be distributed to farmers and key industry stakeholders prior to any decision making process. Independent performance trials must be undertaken and proposed costs must be publicly released to ensure accurate information is given to farmers to allow them to make an informed choice about growing this product. · If tolerance levels are set, they must be based on market demand and the legal definition of ‘GM-free’. Existing contamination should be removed and the cost and liability for this should rest on the company owning the GM crop causing the contamination. In particular, GM contamination can not be accepted if a ‘user fee’ is to be charged of the non-GM farmer as an end-point royalty on contaminated produce. · Workable, practical, cheap and accurate field testing regimes must be in place before any release. Coexistence can not work if there is no real field test. · There must be proof that there is widespread education and acceptance of the coexistence protocols. No sector of industry should be faced with unmanageable problems or additional costs and liabilities without their approval. · Decision making must take into account the interests of all agricultural commodities. Current agricultural systems must be protected to ensure farmer viability. The rights of existing farmers to farm and to choose their farming systems, without being negatively impacted upon by others, must be preserved. They should not be adversely affected by the introduction of GM crops. · Coexistence principles must be based on GM growers containing their product, not on non-GM farmers being required to avoid contamination. A closed-loop marketing system and GM zones for GM crops would be more logical, cheaper and fairer than a closed- loop marketing system and non-GM zones for non-GM crops. · Legislated changes must be implemented to ensure that management plans have legal status for compliance, not voluntary status as proposed, to ensure that the GM industry is responsible for the containment of its GM product. · If GM crops cause economic loss to those not wanting to grow them, there must be a fair and practical compensation regime in place. Liability must be carried by the GM industry, not non-GM growers as proposed. · Farmers’ rights to plant new varieties in non- GM form must be maintained. In Canada, there is currently a trend to take an existing elite plant variety, add a GM gene and sell only the GM version to farmers. Farmer or government funded research institutes must not withhold non-GM varieties to the industry and farmers must be permitted to continue to save these seeds for re-planting. · The concerns of consumers need to be taken seriously. A practical and workable recall strategy must be in place to protect the industry from paying for expensive recalls. 4. The net economic effect of introducing GM canola When calculating the net impact of GM canola on the Australian economy, the various reports to date have included unproven benefits, such as drought tolerance and increased yield; excluded additional costs, such as increased seed and chemical costs; and ignored the reality that markets are rejecting GM crops. Australia exports on average 1.3 million tonnes of canola seed per year. As section 2.3. discusses Canada has experienced an average price penalty of $63/tonne since GM adoption. Since attempts at segregation failed in Canada, there is no reason that it will work in Australia. If GM canola was adopted, it is therefore likely that Australian farmers would face $81.9 million less for their canola every year. As has already happened in Canada, Australia producers are also likely to experience the problem of high levels of carry-in stock (stock not sold immediately), plus an inability to sell all canola due to market access problems. Of this, GM farmers would be penalised $16.38million and non-GM farmers would be penalised the remaining $65.52m. If 20% of Australian farmers adopted GM canola, 183,240 ha would be GM. As discussed in section 1.3.1, the additional costs of growing GM Roundup Ready canola and Invigor canola have been estimated at $27.82/ha and $90.50/ha respectively. Assuming that half the GM canola acreage grown is Roundup Ready and the other half is Invigor, this results in increased costs amounting to $10.84 million. As discussed in section 1.2.1, according to Bayer’s trial data, Invigor yields are similar to those for conventional canola varieties, however Monsanto’s trials indicate that Roundup Ready canola varieties yield on average 13% less than conventional canola. Since the national average yield is 1.26t/ ha, farmers would experience a shortfall of 100,434 tonne valued at $50.2 million if conservatively valued at $500/tonne. In summary, if GM canola was introduced to Australia and 20% of farmers adopted it, Australian farmers will be at least $143 million per year worse off. A key problem is that non-GM farmers will be burdened with a large proportion of this loss, valued at $65.52 million. 5. Proponents of GM crops and their vested interests The push to lift the moratoria in all States is predominantly coming from those with a commercial interest in the uptake of the GM technology. They are well funded and encouraged by both State and Federal Governments who wish to withdraw public funding for research and development and encourage commercial investment. It needs to be recognised that private funding into research and development has expected financial outcomes. These outcomes are not necessarily for the common good and publicly funded organisations such as GRDC or ABARE need to be held accountable for any misleading statements made regarding the profitability of farmers with the introduction of GM crops. 5.1 Government The Australian Federal Government has millions of dollars invested in GM crops through its agencies such as CSIRO - which has strategic partnerships with Monsanto and Bayer. It is also under pressure from the US to lift its barriers to trade around GM crops. The Government has signed a biotechnology strategy encouraging investment in plant breeding in return for providing a path to market for GM crops under few restrictions. State governments are under a national competition policy obligation to ensure public services are competitive and non-profitable plant breeding is not encouraged. Many state government research institutes have investments in biotechnology and hold patents that could prove to be profitable in the future. 5.2 Researchers The research sector is the key driver for promotion of GM crops and much of the reason is the reduction or removal of government funding. Researchers are therefore increasingly reliant on funding from the biotechnology industry. Monsanto holds many plant breeding patents used in both GM and non-GM plant breeding (eg. enzymes and biotechnology techniques). Institutes such as CSIRO are permitted to use these techniques free of charge in exchange for alliance contracts. The conditions of these contracts and deals are kept confidential. 5.3 Seed industry According to USDA research, the seed sector is the key beneficiaries of GM crops as farmers are effectively forced to buy new seed every year. Organisations such as the Oilseeds Federation and Seed Industry Association represent the seed industry and of course are supportive of GM crops. 5.4 Grain buyers GM crops have been promoted to grain buyers (eg. Victorian Dairy Industry, Grainpool) claiming that crops would be discounted if GM crops are introduced. 5.5 Farm lobby groups Most farm lobby groups receive significant funding (particularly for conferences) from the research sector (GRDC) and from the GM companies Monsanto, Nufarm and/or Bayer Cropscience. Policy advisors rely on information supplied by Agrifood Awareness who represent the chemical industry (via Avcare or Lifesciences). 6. Conclusion Since the introduction of the state moratoria on the commercial growing of GM food crops there have still be no independent trials to demonstrate any agronomic benefits associated with GM canola. Furthermore, GM contamination scandals have plagued countries, such as the US, that have adopted GM crops. These have resulted in hundreds of millions of dollars of lost export revenue and and costly litigation. Combined with growing levels of consumer concern regarding the potential health impacts of GM food, it is hardly surprising that recent poll results show that the majority of Australian farmers do not want to grow GM crops and the majority of consumers do not want to eat them.80 Key agronomic, market and coexistence issues remain to be resolved before the State moratoria on GM food crops can be lifted. To allow time for these issues to be resolved the current moratoria should be extended by a further 5 years. Company GM-Policy Attiki “We do not use any GM ingredients in the manufacture of Attiki yoghurt or cheese. All of our milk purchases are made through the Dairy Farmers Co-Op, which has assured us that feed used contains no GM products. All other ingredients used in the manufacturing process have been certified GM free”. November 2002 B.-d.Farm Paris Creek Our policy is: (a) No GM ingredients; (b) no derivatives of GM in any of our products or in the ingredients used in our products (certificates from all suppliers); (c) no animal products fed GM stock feed (we produce our own). Bega Cheese “It is our policy not to use any ingredient containing GMO’s in our manufacturing process. The process is managed through our Ingredient Supplier Assessment Program which requires the supplier to declare products to be supplied are from non GM sources. To manage the possible impact of GMO’s in the milk supply chain it is our policy not to accept milk from transgenic or cloned cows from our suppliers and to limit the possible use of GM feed to the lowest practicable level. This is facilitated by a declaration from the milk suppliers that includes a commitment to ensure that the cow’s nutritional diet will not contain more than 1% GM sourced or possibly contaminated feed.” Elvis Amair, Technical Services Manager, July 2003.” Dairy Farmers “Dairy Farmers policy is to exclude all genetically modified ingredients. This includes both those ingredients that contain modified protein or novel DNA and those ingredients that are derived from genetically modified plants, but do not contain modified protein or novel DNA. Some Dairy Farmers products are manufactured using milk sourced entirely from cattle in South Australia and Victoria where, to the best of our knowledge, no cottonseed is used for supplementary feeding. In these regions, when supplementary feeding is required, Canola Meal is used instead. At this stage, this product is GM free (Dairy Vale, Coon, Shape Cheese, Take Care). For these brands, we can be confident that the milk supply is not from cattle fed on genetically modified crops. Dairy Farmers is not able to guarantee that material from genetically modified crops is not currently in use as a feed in Queensland and New South Wales. Dairy Farmers will work with its suppliers and with the suppliers of stockfeed to identify any sources of supplementary feed that may contain material from genetically modified crops and to phase out the use of supplementary feeds containing material from genetically modified crops.” July 2003” Jalna Dairy Foods “We declare that all our products are made using only non-GM ingredients; non GM derived ingredients; and non-GM feed.” Jeff Carlin, Promotions & Business Development Manager 17th June 2003” Lactos “..use no GM ingredients or GM-derived ingredients in the manufacture process.” Heidi Behrens, July 2003. “GM livestock feed will not be permitted in Tasmania outside of research and physical containment facilities.” Tasmanian Government Gene Technology Policy 2001. “Lactos’ commitment to the use of GM-free stockfeed has been communicated to all of our milk suppliers.” Michel Duleu-Burre, Managing Director July 2003. Murray Goulburn Co-operative “Our “MG Milkcare” program specifically excludes the use of GM feed materials for the production of milk to Murray Goulburn. Our farmers are required to provide a declaration showing that feeds used does not contain GM products. Our policy is also very clear against the use of GM modified animals or cloning of animals for milk production. We do not use GM ingredients or GM additives in the manufacture of our dairy products.” National Foods “National Foods Ltd has a contractual requirement with supplier farmers that raw milk supplied to the company comes from cows which themselves are not genetically modified and have not been fed rations from crops using recombinant DNA technology.” Ian Greenshields - Group General Manager 09/04/02” Norco Co-operative Norco does eliminate ingredients derived from GM crops which constitute an important aspect of the food... Norco Rural Stores has a policy (where) stockfeed products either purchased-in or manufactured in-house are derived from grains which do not contain genetically modified technology. All bought stockfeed be sourced from non GM crops and not to contain GM products. Appendix A Dairy company policies on GM ingredients Parmalat Australia “In relation to genetically engineered or genetically modified (GM/GM) materials, Parmalat has a clear policy to avoid their use whenever possible. Accordingly, we require from all our suppliers, warranties in regard to the GM/GM status of ingredients and additives. For our dairy products, fruit juices and carbonated drinks, none of the ingredients or additives used are GM/GM. For our soy products, the soy beans used to make the soy protein isolate are from non-GM/GM soy beans under a strict “Identity Preservation” system... In the case of milk, our preference is that our farmers avoid GM/GM feed for their cows and seek warranties from their suppliers of compounded feeds when in doubt.” Dr Roger MacBean, Technical Manager Australia Asia, February 2003 Snowy Mountains Organic Dairy “It is our policy that products containing, or suspected of containing, derived or produced using GM methods are not used. The feed that is given to the organic dairy herds is produced on [the] farms and is grown organically, without the use of GM ingredients. No ingredient used in the processing facility [milk] can be traced back to a GM ingredient.” Rod McCormack, Sales & Marketing Manager, June 2003.” Tatura Milk Industries “Tatura Milk Industries is committed to ensuring that all ingredients through the food chain are GM free. The Tatura Quality Milk Program (TQMP) requires our farmers to exclude the use of GM feed materials for the production of milk to Tatura Milk Industries. Tatura Milk Industries actively seeks the purchase of ingredients for manufacturing purposes, which are not derived from genetically engineered crops.” Andrea Farago, Quality Assurance Manager, July 2003.” Warrnambool Cheese & Butter Factory “Our policy is (a)none of our products contain GM ingredients (b)no GM derived ingredients used (c) procedures in place, as part of the on-farm QA program, to exclude GM feedstuffs being used by supplier farmers.” Steve Billington 23/7/03 Endnotes 1 NFU (2005a) GM Crops: Not Needed on the Island, - Recommendations of the National Farmers Union to the Prince Edward Island Legislature’s Standing Committee on Agriculture, Forestry, and the Environment, www.nfu.ca/briefs/2005/PEI%20 GMO%20BRIEF%20TWENTY%20SEVEN%20 FINAL.pdf, viewed 20/6/07. 2 Victorian Government (2004) Media release: Victoria announces four year hold on GM canola, http:// www.legislation.vic.gov.au/domino/Web_Notes/ newmedia.nsf/b0222c68d27626e2ca256c8c001a3d 2d/ce7f8f3fd1a45ea1ca256e6200787a24!OpenDoc ument, viewed 17/8/07. 3 Blue, N. (2007) Risky Business – Economic and regulatory impacts from the unintended release of genetically engineered rice varieties into the rice merchandising system of the US, Greenpeace. 4 Victorian Government (2006) Media Release: Victorian scientist develop drought tolerant canola, www.legislation.vic.gov.au/domino/Web_Notes/ newmedia.nsf/bc348d5912436a9cca256cfc0082d80 0/c405c362f8a2148aca2571c60001df36!OpenDocu ment, viewed 14/8/07. 5 Source: APVMA 6 Co-operative Bulk Handling delivery standards 2007 7 Tharp, B. E. & Kells, J.J. Weed control strategies in glufosinate resistant and glyphosate resistant corn, Michigan State Univ., East Lansing. 8 Weed Science Society of America (1998) WSSA Abstracts, Ref: 1.14 9 See for example: http://www.gmwatch.org/archive2. asp?arcid=4892; http://www.gmwatch.org/archive2. asp?arcid=5818; http://www.biotech-info.net/Full_ version_first_nine.pdf 10 Benbrook, C.M. (2004) Genetically Engineered Crops and Pesticide Use in the United States: The First Nine Years, Northwest Science and Environmental Policy Center, Sandpoint Idaho, October 25, 2004. 11 For more information see: Roundup Ready Stewardship Programme, www.monsanto.com 12 Hansard (2005) Gene Technology (GM Crop Moratorium) Amendment (Postponement of Expiry) Bill, 9 November 2005, http://www.parliament. nsw.gov.au/prod/PARLMENT/hansArt.nsf/V3Key/ LC20051109040, viewed 24/6/07. 13 ABC (2004) Bayer pulls out of GM canola trials, http://www.abc.net.au/news/ stories/2004/06/03/1124071.htm, viewed 16/7/07. 14 Australia: Esperance GM canola trial delayed, WA Business News, 13 November 2007, http://www. wabusinessnews.com.au/story/1/58478/Esperance- GM-canola-trial-delayed, viewed 22/11/07. 15 Splitting headache: Monsanto’s modified soya beans are cracking up in the heat, New Scientist, November 20, 1999. 16 Elmore et al (2001) Glyphosate-Resistant Soybean Cultivar Yields Compared with Sister Lines, Agronomy Journal, 93: 408-412, available at: http://screc.unl.edu/Research/Glyphosate/ glyphosateyield.html 17 OGTR (2003) Risk Assessment and Risk Management Plan, DIR 021/2002, Commercial release of genetically modified (InVigor® hybrid canola, www.ogtr.gov.au/rtf/ir/ dir021finalrarmpsum2.rtf, viewed 22/11/07. 18 Sources: Canola Council of Canada: Canadian Canola Industry; Australian Oilseeds Federation: Area and Production Canola. 19 NFU (2005a) 20 Source: Agriculture and Agri-Food Canada data, cited in NFU (2005b) GM Crops: Not Needed on the Island, http://www.nfu.ca/briefs/2005/PEI%20 GMO%20BRIEF%20TWENTY%20SEVEN%20 FINAL.pdf, viewed 16/7/07 – attached. 21 Sources: Broad, A. (2006) Best practice canola production: Exploring biotechnology, agronomic advances and new grower techniques, www.nuffield. com.au/report_f/2005/Andrew%20Broad%20 2005%20report.pdf; Australian Pesticides and Vetinary Medices Authority; and Bayer’s presentation to the WA Parliamentary hearing for Invigor canola. 22 Broad, A. (2006) 23 Anderson, K. & Jackson, L. A. (2005) Global Responses to GM Food Technology: Implications for Australia, RIRDC, .http://www.rirdc.gov.au/reports/ GLC/05-016.pdf, viewed 22/11/07. 24 NFU (2005b) The Farm Crisis & Corporate Profits, www.nfu.ca/briefs/2005/corporate_profits.pdf, viewed 13/8/07. 25 NFU (2000) 26 NFU (2007) Submission by the National Farmers Union on The Farm Income Crisis Business Risk Management, and The “Next Generation” Agricultural Policy Framework, April 26th, 2007 www.nfu.ca/briefs/2007/NFU_Brief_to_ Commons_Ag_Committee_on_the_Farm_Income_ Crisi%5B1%5D..pdf, viewed 13/8/07. 27 NFU (2005a) 28 Source: NFU (2007) 29 Centre for Food Safety (2005) Monsanto vs. US Farmers, www.centerforfoodsafety.org/pubs/CFSM OnsantovsFarmerReport1.13.05.pdf, viewed 13/8/07. 30 NFU (2005a) 31 Statistics Canada, December 8, 2005 release. www. statcan.ca, cited in NFU (2007) 32 NFU (2007) 33 NFU (2005b) 34 ABARE (2007) Australian Commodities: June Quarter, www.abareconomics.com/publications_ html/ac/ac_07/ac_june07.pdf, viewed 13/8/07. 35 Annual average, three years to 2005-06, Source: Foster, M. & French, S. (2007) Market acceptance of GM canola, ABARE research report 07.5, March 2007, available at: www.abareconomics.com/ publications_html/crops/crops_07/GM_Canola.pdf, viewed 13/8/07. 36 Foster, M. et al (2003) p. 17 37 NFU (2005a) 38 Foster, M. et al (2003) p. 17 39 The Pew Research Center (2003) Broad Opposition to Genetically Modified Foods: Modest Transatlantic Gap, 20/6/03, http://people-press.org/commentary/ display.php3?AnalysisID=66; Stearman, K. (2005) United States tries to derail discussion on labelling of GM food, 11/5/05, www.gmwatch.org/archive2. asp?arcid=5228; GM Free Cymru (2005) Second Bt contamination incident in Japan, 7/6/05, www. gmwatch.org/archive2.asp?arcid=5341; Reuters (2005) CHRONOLOGY-Recent events in Bt-10 corn controversy, 1/6/05, www.reuters.com/newsArticle. jhtml?type=topNews&storyID=8669951; all viewed 15/6/05. 40 ABC Rural (2007) Japanese consumers weigh in on Australian GM debate, 15/10/07, http://www. abc.net.au/news/stories/2007/10/15/2059762.htm, viewed 15/11/07. 41 Western Australia Standing Committee on Environment and Public Affairs (2001), paragraph 10 42 ABC North & West SA (2005) Interview: Perry Gunner, ABB Grain, SA Country Hour, 23/6/05, 12:19 pm. 43 Canola Insight (2007) Canadian canola exports in 07/08 to decrease over prior year’s estimate, http:// canolainsight.com/canolahome/story_cangeneral. html?table=news&ID=7359, viewed 14/8/07. 44 Black, S. (2007) Japanese buyers seal canola deal, The Islander, 25/10/07, http://www.kangarooisland. yourguide.com.au/news/local/general/japanese- buyers-seal-canola-deal/1075552.html, viewed 14/11/07. 45 McCoy, S. & Parlevliet, G. (2000) Export market potential for Clean & Organic Agricultural Products, RIRDC 46 Agriculture and Agri-food Canada (2006) Canola: Situation and Outlook, Bi-weekly bulletin: Volume 19, Number 17 http://www.agr.gc.ca/mad-dam/index_e. php?s1=pubs&s2=bi&s3=php&page=bulletin_19_17_ 2006-11-30&PHPSESSID=3ddca65c0676e448057f2 538abe6e4a1, viewed 13/8/07. 47 Ibid. 48 ABARE (2007) Market Acceptance of GM Canola, www.abareconomics.com/publications_html/crops/ crops_07/GM_Canola.pdf, viewed 17/8/07. 49 Dowling, J. (2007) Food giant enters fight to keep GM bans, The Sunday Age,11/11/07, p. 3, http:// www.theage.com.au/articles/2007/11/10/11943295 68795.html, viewed 17/11/07. 50 Farm Online (2007) Coles speak out against GM crops, 22/11/07, http://www.farmonline.com.au/ news_daily.asp?ag_id=47082, viewed 22/11/07. 51 Dowler, K. (2003) Our customers don’t want GMs: AWB, ABB, Stock Journal, 9/9/03. 52 NFU (2000) NFU Policy on GM Foods, www.nfu. ca/policy/GM_FOOD_POLICY.misc.pdf, viewed 13/8/07. 53 National Human Genome Research Institute (2007) New Findings Challenge Established Views on Human Genome, http://www.genome. gov/25521554, viewed 16/7/07. 54 Séralini, G-E, Cellier, D. & Spiroux de Vendomois, J. (2007) New analysis of a rat feeding study with a genetically modified maize reveals signs of hepatorenal toxicity. Archives of Environmental Contamination and Toxicology DOI: 10.1007/s00244- 006-0149-5. (Hepatorenal = of or pertaining to the liver and kidneys). 55 Greenpeace (2004) Greenpeace critique of Monsanto’s Roundup Ready Oilseed Rape, GT73, http://saveourseeds.org/downloads/gp_GT731_ comments.pdf, viewed 16/7/07. 56 Young, E. (2005) GM pea causes allergic damage in mice, New Scientist, http://www.newscientist.com/ article.ns?id=dn8347, viewed 16/7/07. 57 Various FSANZ safety assessments can be viewed at: http://www.foodstandards.gov.au/newsroom/ technicalreportserie1338.cfm, viewed 16/7/07. 58 Source: DAFWA, 2006 –quoted in media release by Kim Chance (2006) ‘State Government questions Federal stance on State GM moratoria’, available at: http://www.ministers.wa.gov.au/chance/index. cfm?fuseaction=media.main#, viewed 21/6/07. 59 WA Department of Agriculture (2002) International Market Trends for Genetically Modified Crops, Government of Western Australia. 60 Ibid. 61 Portman, P. and Tucek, M. (2001). ‘Marketing GM crops: market issues facing Australia if it moves into GM crops.’ Outlook 2001, Proceedings of the National Outlook Conference, Canberra, Vol. 2. Agriculture and Regional Australia, ABARE, pp. 189- 195. 62 ABARE (2007) Market Acceptance of GM Canola, www.abareconomics.com/publications_html/crops/ crops_07/GM_Canola.pdf, viewed 17/8/07. 63 Hunt, K. (2007) Tatiara meat company calls for gm ban extension, 13/11/07, ABC Rural South Australia, http://www.abc.net.au/rural/sa/content/2006/ s2089653.htm, viewed 22/11/07. 64 Gene Technology Grains Committee (2003) Canola Industry Stewardship Principles: Delivering Market Choice with GM canola: Single Vision: http://www. afaa.com.au/pdf/Delivering_Market_Choice_with_ GM_canola.pdf, viewed 22/11/07. 65 Jeff Bidstrup (2006) Producers Forum Letter to Australian Grain Harvesters Association, 7th October 2006 66 Gene Technology Grains Committee (2003) 67 Source: CBH delivery docket 68 Source: Gene Technology Grains Committee and Crop Management Plans. 69 NFU (2005a) 70 NFU (2005a) 71 Western Australia Standing Committee on Environment and Public Affairs (2001) Inquiry into the Gene Technology Bills: Executive Summary, para. 18. 72 Western Australia Standing Committee on Environment and Public Affairs (2001) section 9.52. 73 Foster, M. et al (2003) Market Access Issues for GM Products: Implications for Australia, ABARE Research Report 03.13, p. 9. Available at: http:// abareonlineshop.com/product.asp?prodid=12559, viewed 24/6/05. 74 Friesen, L., Nelson, A. & Van Acker, R. (2003) Evidence of Contamination of Pedigreed Canola (Brassica napus) Seedlots in Western Canada with Genetically Engineered Herbicide Resistance Traits,” Agronomy Journal 95, 2003, pp. 1342-1347, cited in NFU (2005b). 75 Mellon, M & Rissler, J. (2004) Gone to Seed: Transgenic Contaminants in the Traditional Seed Supply, Union of Concerned Scientists, cited in NFU (2005b). 76 Ramsay, G., Thompson, C. & Squire, G. (2004) Quantifying landscape-scale gene flow in oilseed rape, Scottish Crop Research Institute and the UK Department for Environment, Food, and Rural Affairs (DEFRA), October 2004, p. 4. www.defra.gov.uk/ environment/gm/research/pdf/epg_rg0216.pdf, viewed 16/7/07. 77 Source: Australian Harvesters Association 78 Frid, A. , Keenan, L. & Kiers, T. (2005) Genetically engineered canola contamination across Japan, Greenpeace. 79 Department of Agriculture Fisheries and Forestry (2003) Liability Issues Associated with GM Crops in Australia, September 2003, http://www.affa.gov. au/content/output.cfm?ObjectID=397E43B7-58BA- 4111-BDE46C8AB2961114 80 Sources: Rural Press National News Service, Parliament House Bureau, Canberra, cited in: Skuthorp, L (2007) FARM POLL: Mandate ethanol, but give GM a miss, 4/10/07, http://nqr.farmonline. com.au/news_daily.asp?ag_id=45891; Swinburne University (2007) Media release: Australians more relaxed about wind farms than the internet, 24/10/07, http://www.swinburne.edu.au/corporate/ marketing/mediacentre/core/releases_article. php?releaseid=996 - both viewed 31/10/07.